- Call for inquiry into Telegraph’s ownership
- Concerns over Middle Eastern financing
- Impact on regulatory bodies
Lucy Frazer, the culture secretary, is being strongly urged to initiate an inquiry into the financing arrangements being utilized by the erstwhile owners of the Telegraph to reclaim ownership of the titles.
Concerns Over Middle Eastern Financing
In order to regain control of The Daily Telegraph, a backbench Conservative MP is demanding that the government investigate the Barclay family’s use of Middle Eastern-based financing.
Culture secretary Lucy Frazer was urged by Danny Kruger, member of parliament for Devizes, to issue a Public Interest Intervention Notice (PIIN) regarding the financing supporting Barclays’ efforts to repay Lloyds Banking Group more than £1 billion.
Referring to the Telegraph titles as ‘a treasured national asset’, he warned that ‘If material influence over, or control of, a quality national newspaper was passed to an unknown foreign ruler at any time it would raise concerns, but at a heightened time of geopolitical turmoil, I believe it is more important than ever that this deal… is given proper scrutiny’.
Potential Impact on Regulatory Bodies
The disclosure of a PIIN could potentially infringe upon the investigation conducted by the Competition and Markets Authority, Ofcom, the media regulator, and Barclays, thereby undermining their assertion that their proposal provides an expeditious resolution to the ambiguity pertaining to the Telegraph and Spectator’s future.
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Mr. Kruger stated in the letter: “It has long been British Government policy that foreign investment into influential British media should be scrutinized through the use of Public Interest Intervention Notices, and I would urge you to take similar action in this case.”
Opposition to Lack of Transparency
Last week, during a court hearing in the British Virgin Islands, he described Barclays’ refusal to reveal the identities of their patrons as “contrary to the transparency of ownership that is typically expected in a democratic society with a free press.”
The largest lender in the United Arab Emirates, First Abu Dhabi Bank, has reportedly agreed to finance the family. However, Sheikh Mansour bin Zayed Al Nahyan, the ultimate owner of a controlling stake in Manchester City Football Club, is reportedly among those in discussions to commit the underlying funds.
Mr. Kruger expressed concern that “the amount of the loan from the anonymous funder is far beyond what The Telegraph and The Spectator could commercially support.”
“This situation prompts inquiries regarding the motivations behind the anonymous funder’s willingness to extend the loan, considering the absence of a commercial justification and the potential agreement of terms between the funder and the Barclays family.”
“The Public Interest Intervention Notice (PIIN) process is designed to allow the Government to get to the bottom of these questions.”
He contended that the issuance of a PIIN by the government regarding the procurement of the Evening Standard and Independent titles in 2019 by “an investor with significant ties to Saudi Arabia” established a precedent.
According to individuals with close ties to Barclays, the comparison was disregarded on the grounds that the financing received from investors in Abu Dhabi would not necessitate the transfer of material governance rights, influence, or the sale of an equity stake.
The family’s spokesman issued the following statement: “The Barclay family has put forth a proposal to Lloyds Banking Group pertaining to the resolution of delinquent liabilities.”
“A PIIN being issued in connection with a debt transaction is both unfounded and without precedent. We are confident that the family’s plan would not trigger media asset ownership regulatory assessments.”
“We continue to believe that our proposal offers Lloyds Banking Group and its shareholders the most compelling, straightforward, and speedy resolution to this situation.”
Mr. Kruger urged Ms. Frazer to provide a PIIN “within the next few days” so that “His Majesty’s Government can ascertain precisely who would assume control of the Telegraph Media Group should this transaction proceed.”
He further stated, “While a PIIN would not predispose you to the issue of whether funds from an unidentified Emirati source are problematic, it would enable you to collect all the necessary information to evaluate the situation.”
This is critical to our democracy and ensuring a strong and free press in the UK.
Competing Bidders and The Barclay Family
Lloyds has auctioned newspapers and The Spectator magazine, and Goldman Sachs will oversee bidder discussions.
The Telegraph has attracted several rival suitors, including Lord Rothermere, the proprietor of the Daily Mail, former Daily Telegraph editor Sir William Lewis, and hedge fund billionaire Sir Paul Marshall.
Die Welt publisher Axel Springer and London-listed media conglomerate National World are interested in the auction.
Aidan Barclay, the nephew of Sir Frederick Barclay, the octogenarian who, with his late brother Sir David, orchestrated the acquisition of the Telegraph twenty years prior, presided over the newspapers until June.
For several years, Lloyds and Barclays had been engaged in negotiations regarding the refinancing of loans that HBOS had extended to them prior to the latter’s intervention in the 2008 financial crisis.
The family’s Lloyds debt includes funding from Barclay’s online retailer Very Group.
A new board led by Openreach and IG Group chairman Mike McTighe oversees Telegraph and Spectator sales.
TMG and The Spectator (1828)’s parent companies, Press Acquisitions and May Corporation, are chaired by Mr. McTighe.
